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Trump’s Nomination, Helicopter Money and More

What You Missed This Week on Economy & Markets

It’s early Friday here at Dent Research as another week winds to a close. I came in a bit early to cruise the mainstream news cycle before writing you and it still pounds with chatter from the GOP National Convention.

Eric Garner Protests in Manhattan, December 2014 about 1:30 a.m. on a Thursday.

But, it’s a dark time in this country for a great many people and we face options ahead that Trump may best be equipped to address. It may not be terribly pretty, but there’s a solid chance he’ll be our next president.

Straight to the Heart… Before it’s too Late

“[Trump] hit right to the heart of the broader middle class by acknowledging that it’s their wages that have been most hurt by foreign workers in Asia and legal and illegal immigrants here in the U.S.

“These people are mightily pissed and Trump speaks to exactly what they are feeling. These are the people working as hard as ever and getting absolutely nowhere. Real wages have been declining since 2000 and are back near 1973 levels.

It ain’t pretty”.

Eric Garner Protests in Manhattan, December 2014 about 1:30 a.m. on a Thursday.

Harry also this week pointed out it isn’t pretty in Europe right now either, following the nearly non-event that was the “Brexit”.

Starting in Italy, banks have a problem. Back when the old rules actually meant something, when a bank had 10% non-performing loans, it was technically bankrupt. That’s 10% of our pledged deposits against their bad loans.

Italy has 18% non-performing bank loans. They’re not technically bankrupt. They are bankrupt.

Greece has non-performing bank loans of 34%.

Ireland 19%.

Portugal 12%.

And we haven’t seen the next serious financial crisis yet.

Head in the Sand Syndrome – (HSS)

“Its stock is now down 89% from its early 2008 high, and 62% from its 2015 high. Just look at Deutsche Bank. It had its largest loss in history in the fourth quarter of 2015: $7 billion, without any help from the next financial crisis!

“Just look at Deutsche Bank. It had its largest loss in history in the fourth quarter of 2015: $7 billion, without any help from the next financial crisis!UniCredit is the largest bank in Italy. Its stock is down 94% since the 2008 high, and 71% since its 2015 high.”

Eric Garner Protests in Manhattan, December 2014 about 1:30 a.m. on a Thursday.

Maybe the reason mainstream media hasn’t focused on these concerns is because acknowledging the problem leads to the next question: what can we do to fix it?

But because the problem is so vast and deeply entrenched, and massive, in so many parts, a solution is hard to imagine. All officials have managed to come up with so far is: “We’ll do whatever it takes.” (aka Mario Draghi).

That drive to do whatever it takes is what brought Charles, Thursday, to write about Helicopter Money and its use as a last ditch effort to maintain the status quo.

Here Come the Helicopters

This is a Sikorsky Sea Stallion helicopter photographed from the deck of the USS PONCE about 70 miles from the Iranian Coast. It is about to release underwater mine-clearing gear. IMCMEX Exercise 2012 originally published at Business Insider.

“Bernanke reportedly suggested that the Japanese Government issue perpetual zero-coupon bonds that would be immediately snapped up by the Bank of Japan.

“Stop and think about that for a minute. Perpetual… and zero coupon. That means it is a bond that pays no interest and never has to be paid back. We have a word in English for that. It’s called a gift.

“What Bernanke is suggesting is about as close to real-life helicopter money as you can get. The Bank of Japan would be creating money out of nothing and essentially giving it to the Japanese government to finance its expenses.”

It’s uncharted economic waters ahead for the indefinite future. Stay tuned with us at Dent Research and we’ll continue to help you keep your bearings.

Play safe,

Robert Johnson

Editorial Director, Dent Research

P.S. Europe has a problem – a big problem – that Harry has been talking about since February, when he dedicated his elite-members-only newsletter, The Leading Edge, to unraveling the details of the disaster looming on the other side of the Atlantic. Yet, only now is the mainstream media starting to talk about this. Why? Why did it take them so long to see what Harry was able to see five months ago? On Harry’s instruction, we reran one of his Economy & Marketpieces on this last week. We gave away that Leading Edgeissue to anyone interested in seeing how bad this problem really is… and how Harry knew about it so far ahead of everyone else. Watch out for it next week.

P.P.S. Talk about being ahead of the curve. As I was wrapping up this letter to you, I came across this post at Seeking Alpha about lithium and Tesla. Rodney talked about this in June already, explaining to Boom & Bust subscribers what was going on. And Charles, the Boom & Bust Portfolio Manager, added a new play to the mix to take advantage of the incredible advancements in this area. Just sayin’ – it pays to keep us around 😉

Hey Wait…

Eric Garner Protests in Manhattan, December 2014 about 1:30 a.m. on a Thursday.

Robert is a U.S. Army veteran who attended NYU's Arthur J. Carter Journalism and Stern Business School on the GI Bill. He was a Founding Editor and Senior Correspondent at Business Insider for more than three years. His written work has appeared in the USA Today, CNN, Mail Online, Huffington Post, Us, Drudge and Yahoo Finance.
He holds the Missouri Press Association - Best Business Feature Award - 2011 and his photojournalism is printed, and online, throughout the world.